The IMF and World Bank downgraded the region as infrastructure attacks disrupted markets and investment, while Egypt reported stronger inflows but a wider current-account deficit.
For immediate release | 18 October 2026 | Coverage period 12–18 October 2026
The conflict’s economic cost moved into official forecasts this week. The World Bank projected a 2.1% regional contraction in 2026 and a 4.3% decline across GCC economies. The IMF warned that recovery depends on energy production, shipping and trade beginning to normalise in early 2027. (World Bank — MENAAP Economic Update, October 2026; Reuters — IMF regional briefing, 15 October 2026)
Saudi attacks weakened Gulf equities, postponed an EU–GCC summit and pushed the Future Investment Initiative toward a hybrid format. Egypt’s payments balance returned to surplus, but its current-account deficit widened.
Confirmed development: The World Bank’s October update projected regional output to fall 2.1% in 2026 after 3.3% growth in 2025. It said the closure of the Strait of Hormuz had reversed the usual pattern in which Gulf oil exporters benefit from energy shocks. Developing oil importers were expected to grow 4.3%, although higher food and energy prices were increasing pressure. (World Bank — MENAAP Economic Update, October 2026)
The IMF’s 13 October global outlook projected world growth of 3.1% in 2026 and global inflation of 4.7%. In a regional briefing on 15 October, the Fund forecast a 1.3% contraction for the Middle East, North Africa and Pakistan, followed by 6.6% growth in 2027. That rebound assumes normal trade and shipping resume in the first quarter and exports gradually normalise by mid-year. (IMF — World Economic Outlook, 13 October 2026; Reuters — IMF regional briefing, 15 October 2026)
Hauberk analysis: The 2027 rebound is therefore conditional rather than secured. Asset valuations based on a rapid recovery should be tested against slower reopening, higher insurance costs and delayed infrastructure repair.
Reported development: A Reuters investigation published on 15 October identified at least 135 Iranian or Iran-aligned strikes on at least 84 Gulf infrastructure sites since late February. The reported targets included Fujairah’s oil zone, Qatar’s Ras Laffan LNG complex, Saudi pipeline pumping stations and airports across four countries. Reuters said several major facilities could require a year or more for full restoration. (Reuters — Gulf infrastructure investigation, 15 October 2026)
Alternative routes are not independent when pipelines, ports, airports, power and communications share correlated threats. Redundancy must be assessed at component level, not by counting routes or jurisdictions.
Confirmed and reported developments: Saudi Arabia’s benchmark fell 0.7% on 12 October after another airport attack, while Brent traded above $106 a barrel. By 15 October, Saudi equities were heading for a sixth weekly decline; Qatar’s index fell to its lowest level in more than six years, and Dubai and Abu Dhabi also closed lower. A joint EU–GCC summit planned for Saudi Arabia was postponed amid travel concerns. (Reuters — Saudi and Gulf markets, 12 October 2026; Reuters — Gulf markets, 15 October 2026)
Reuters reported on 13 October that Saudi Arabia planned remote participation in the Future Investment Initiative after the Riyadh airport attacks. The hybrid format showed how access and executive mobility can affect capital raising even when institutions and venues remain operational. (Reuters — FII hybrid format, 13 October 2026)
Confirmed development: The Central Bank of Egypt reported on 12 October that the balance of payments recorded a $2.8 billion surplus in FY2025/26, reversing a $2.1 billion deficit a year earlier. Net capital and financial inflows reached $23.2 billion. However, the current-account deficit widened to $22.5 billion from $15.4 billion, leaving the overall position dependent on continued financing inflows. (Central Bank of Egypt — Balance of payments, 12 October 2026)
High oil prices and strong sovereign balance sheets do not neutralise physical disruption. Investors, businesses and family offices should map the chain behind each asset: transport, power, data, insurance, banking access, decision-makers and alternative providers.
Liquidity planning should separate market liquidity from operational liquidity. Recovery assumptions should follow observable milestones—reopened routes, repaired facilities, restored capacity and insurable operations—not calendar dates alone.
About Hauberk Capital: Hauberk Capital provides strategic perspectives on capital preservation and long-term wealth management across the MENA region.
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